Repairing a College Credit Rating

Posted by: Meredith K. | Jan 03,2008


I spent yesterday talking about one major way to effectively budget in the new year: cut down on entertainment expenses.  What if you’ve wrecked your credit in college and your entering post-grad life with a 300 credit rating?  It’s been known to happen.  In fact, it’s common.  

Fact is, college students just aren’t that responsible when it comes to money.  Picture it: a dorm room or first apartment.  Laundry everywhere, week-old pizza boxes, that credit card bill is under there somewhere.  Sure, there are perfectly neat and responsible college students, but most late teenagers probably do not have a filing system set up for their financial information.  It wouldn’t be surprising if a student just forgot to pay their credit card bill once or three times.  They might not even realize the damage that can be incurred by neglecting a bill.  Maybe they couldn’t afford it and thought, I’ll just wait until next month.  

Whatever the reason, post-grads may be looking at a pretty low credit rating.  Not only is your credit rating short – a major factoring in determining a rating – but there may be some past delinquencies as well.  So how to get your rating back up to snuff.  

One thing you have in your favor is time, and when it comes to credit repair that’s the most important thing.  There are no overnight solutions.  Because you’re probably not going to be in the market for a house in the next five or so years, you’ve got time to get your credit in order.  You may need to get a car in that time, however, so it’s important to repair your credit rating ASAP.  In addition, landlords and employers may check your rating.  

The first step is to order a free copy of your credit report.  On the report, you can see hw exactly your credit got damaged.  You can also see if there any inaccuracies, such as an account being listed as open that was closed years ago.  Maybe there’s an account that you’ve forgotten about that needs to be closed.

Beyond that, the main thing you need to start doing is being responsible, simple as that.  Pay your bills on time, get your credit card balance to 40% or below your credit limit.  Like I said, there’s no quick fix.  A credit rating is not just about paying your bills on time, but paying your bills on time for an extended period.  So long as you do that, your credit will starting ticking upwards.  

If you have poor credit because you have a limited credit history, you should think about opening up a new credit card account and using it for small purchases/paying it off to establish a history.  Keep in mind also that all your other bills – phone, electric, water, etc. – can also affect your rating so be sure to pay these bills on time as well.  If you live with roommates and you put a gas bill in your own name, their delinquency on the bill can hurt your rating so be wary of doing this with roommates who you don’t trust to be responsible.  

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